Georgia’s banks continued their slow return to health, posting an industry-wide profit for the second straight quarter after nearly three years of losses.
The state’s banks reported cumulative net income of $324.3 million during the third quarter, compared to a industry-wide loss of $296 million in the July-September period last year, according to data released Tuesday by the Federal Deposit Insurance Corp.
SunTrust Banks, the state's largest, posted a profit of $211 million in third quarter, accounting for two-thirds of state industry earnings.
Nearly 60 percent of the state’s banks were profitable, about even with second quarter and an improvement from a year ago when more than half were in the red.
The FDIC said about 60 percent of Georgia banks also improved earnings in third quarter compared to second quarter of this year.
One reason for the improved performance is the state banks' determination to set aside less money to cover bad loans. Cumulative loan loss allowances were $4.38 billion, a 3 percent decline from second quarter and down more than 16 percent from third quarter 2010.
Other key banking metrics also improved.
According to the FDIC, 4.95 percent of loans at the state's banks were considered non-current in the third quarter, nearly a percentage point improvement over last year.
Foreclosed real estate held by banks fell 16 percent from a year ago to $2.92 billion.
Total loans and leases stood at $185.2 billion, down 4.4 percent from a year ago, though up slightly from second quarter. Deposits dipped 2 percent to $210.9 billion since last year.
Joe Brannen, president and CEO of the Georgia Bankers Association, said he was encouraged by "continued signs of stabilization and improvement."
But with loan problems still higher than historical norms, challenges for the industry remain.
Five Georgia banks failed during the third quarter. Georgia leads the nation in failures since mid-2008 with 74.
The state also lags the recovery seen nationwide. Eighty-six percent of U.S. banks posted third-quarter profits.
Nationally, the number of troubled banks on the FDIC’s “problem list” dipped for the second straight quarter and now stands at 844.
FDIC Acting Chairman Martin J. Gruenberg noted the national improvement, but cautioned that "the recovery is by no means complete."
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